Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- DUK's very impressive revenue growth greatly exceeded the industry average of 9.8%. Since the same quarter one year prior, revenues leaped by 69.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 25.8% when compared to the same quarter one year prior, rising from $472.00 million to $594.00 million.
- Net operating cash flow has significantly increased by 50.91% to $1,977.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.12%.
- The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
- DUKE ENERGY CORP's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DUKE ENERGY CORP increased its bottom line by earning $3.84 versus $3.00 in the prior year. This year, the market expects an improvement in earnings ($4.30 versus $3.84).
Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States and Latin America. The company operates in three segments: U.S. Franchised Electric and Gas, Commercial Power, and International Energy. The U.S. Duke Energy has a market cap of $42.95 billion and is part of the utilities sector and utilities industry. The company has a P/E ratio of 19.4, above the S&P 500 P/E ratio of 17.7. Shares are down 7.9% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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